As part of a formal investigation, the European Commission has issued a preliminary report that finds U.S. laws on Internet gambling are legally not justified and discriminatory. The report found that the treatment of foreign Internet gambling operators by the U.S. under existing domestic law constituted a barrier to market access for European companies and is inconsistent with World Trade Organization (WTO) rules. Legislation previously introduced by Rep. Barney Frank (D-Mass.) would resolve the trade dispute by regulating Internet gambling and creating a level playing field among domestic and foreign Internet gambling operators.
"The European Commission investigation further highlights the need forthe Obama Administration and Congress to regulate Internet gambling notonly to protect consumers, but in order to restore integrity to theinternational trade system," said Jeffrey Sandman, spokesperson for theSafe and Secure Internet Gambling Initiative. "The Obama Administrationshould seek to forge a new direction on Internet gambling, rather thankeeping in place a protectionist trade policy that hypocriticallydiscriminates against foreign online gambling operators."
E.U. Trade Commissioner Catherine Ashton released a statement thatencourages the U.S. to regulate Internet gambling as a way to address thisissue. "It is for the U.S. to decide how best to regulate Internet gamblingin its market, but this must be done in a way that fully respects WTOobligations. I am hopeful that we can find a swift, negotiated solution tothis issue," said Commissioner Ashton.
Rt Hon. David Blunkett MP, former U.K. Home Secretary and currentMember of the U.K. Parliament joined in calling for U.S. regulation,saying, "I fully support the call by the E.U. Trade Commissioner, CathyAshton, for urgent U.S. action to regularise the trade relationship,respect WTO rules and to regulate online gambling. This would provide notonly fair competition, but protection for individuals and families, and alegal basis on which substantial revenue could be raised at a time ofconsiderable pressure on public finances."
The investigation by the European Commission is the result of a TradeBarrier Regulation complaint filed by the Remote Gambling Association(RGA), which represents the largest remote gambling companies in Europe. Inits complaint the RGA claims the United States violates international tradelaw by threatening and pursuing criminal prosecutions, forfeitures andother enforcement actions against foreign Internet gambling operators,while allowing domestic U.S. online gambling operators, primarily horsebetting, to flourish.
At the conclusion of the investigation, the European Commission couldpursue discussions with the U.S. to find an appropriate solution to end thediscrimination. If the parties cannot settle the matter themselves, theCommission could bring a case against the U.S. to the WTO. A recent analysis found that the U.S. could receive as much as $51.9billion in federal revenue over the next decade if Internet gambling isregulated as proposed in legislation previously introduced byRepresentatives Barney Frank (D-Mass.) and Jim McDermott (D-Wash.).
About Safe and Secure Internet Gambling Initiative The Safe and Secure Internet Gambling Initiative promotes the freedomof individuals to gamble online with the proper safeguards to protectconsumers and ensure the integrity of financial transactions. For moreinformation on the Initiative, please visit http://www.safeandsecureig.org. TheWeb site provides a means by which individuals can register support forregulated Internet gambling with their elected representatives.
